Pensions in 2025: When and by how much can payments be raised?

In the year 2025, the government is expected to address the adequacy of pension payments. Will there be an increase in pension amounts? When is the indexation scheduled? Is there a possibility that certain individuals may face the discontinuation of their pension benefits?

According to the approved 2025 state budget, UAH 420.9 billion is allocated for social protection of citizens, which includes support for pensioners (including pension indexation from March 1, 2025), low-income families, and people with disabilities. Of this amount, transfers to the Pension Fund will be UAH 236.9 billion, and payments for benefits and subsidies will be UAH 42.3 billion.

“Social needs continue to be a priority in the 2025 budget, although there is a small reduction in allocations for these needs compared to the previous year,” noted Oleksandra Myronenko, an economist at the Centre for Economic Strategy.

“The largest item of social spending is the provision of pensions and their increases. These funds are redirected from the state budget to the budget of the Pension Fund. For 2025, a 13% reduction in this item is planned, to UAH 237 billion. However, the final amount of the Fund’s income remains unchanged due to higher planned Unified Social Contributions (USC) collections. Thus, the state budget contribution to the revenue structure is decreasing, and the Fund’s financial independence is increasing. The Fund’s own revenues are slightly increasing in 2025, planned at the level of UAH 579.5 billion,” explained Oleksandra Myronenko.

Pension reform in Ukraine: what is the future of pension payments?

According to the draft law of the Ministry of Social Policy, which has not yet been submitted to the parliament but has been made public for discussion, a fundamental overhaul of pensions is planned. Specifically, the following changes are planned:

• Solidarity level of the pension system: The payment will consist of two components: insured (currently received by pensioners in Ukraine) and basic pension.
• Individuals who at the age of 65 do not have sufficient work experience but have accumulated a certain number of points (their number will depend on the size of the salary) will be able to retire.
• The calculation of the amount of the insured payment will be completely revised.
• Introduction of a mandatory accumulative level of the pension system.

Furthermore, the government’s proposed reforms seek to enhance the equity and sufficiency of pension benefits. Specifically, the reform is designed to streamline pension calculations and tie them directly to the level of insurance contributions.

“Regarding the future of the accumulative tier of the pension system, we believe that the risks of its implementation are too high. First, the war must end, and the economy and the rule of law must be stabilized. Only then can we consider long-term hryvnia savings by citizens,” added Oleksandra Myronenko.

Pension indexation despite the war

“The Ministry of Social Policy states that pensions will be indexed in 2025, despite the decrease in transfers from the state budget. The actual amount of the Pension Fund’s expenditures will be known once its budget for the following year is approved,” said Oleksandra Myronenko.

Source: Фокус.

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